Who is really shaping the future of Melbourne’s housing?

A new study by RMIT academics reveals that revamped government planning policies designed to deal with Melbourne’s escalating population pressures and housing supply problems have fallen well short of the mark.

The report published in the Sydney Morning Herald, focused on two major planning policies; the Kennett government’s standardised planning system introduced in 1996, to encourage development and increase cooperation between local councils, and the Bracks government’s Melbourne 2030 initiative, intended to reduce urban sprawl by promoting higher density development.

Co-author and Australian Housing and Urban Research Institute research director Robin Goodwin says, ”From what we can tell, neither seemed to have happened.”

The study also found that, rather than the average Australian home getting smaller as a result of increasing affordability issues, they in fact got bigger between 1990 and 2008, with McMansions continuing to reign supreme.

During the 18 year period, the median floor size of new homes increased by a quarter, while in urban growth corridors the increase was far more apparent with house sizes jumping by 31%.

And while houses have grown, land allotments have shrunk in urban growth areas by 14%.

Even though our demographic make up is changing, with shrinking family sizes as more women opt to have less children later in life, the study indicates that four bedrooms rather than the traditional three have now become the norm on the urban fringe.

However, Goodman says development in the outer suburbs is so far removed from what has occurred in Melbourne’s CBD during the same period that, ”It’s like they’re not in the same city,” with a third of dwellings in the inner city having only one bedroom, and floor sizes shrinking by 24% in the 18 year period.

The study notes, ”A divergent pattern is thus apparent, with increasingly large housing on the fringe in particular, and smaller apartment housing in the inner areas.”

Interestingly, the report reveals that just over 1.5 million dwellings made up Melbourne’s total existing housing stock in 2008, with 42.7% of these located in the city’s middle ring, compared to only 20% in allocated growth areas.

While many planning policies were intended to bring people’s homes closer to their workplaces, the opposite has actually occurred, with new housing being built in areas where there were far less jobs.

One of the key aspects of the Melbourne 2030 initiative was to centralise new development around so-called “transport hubs”, where existing public transport links would make commuting easier. However the RMIT study shows that the opposite has in fact occurred, with a notable decline in the proportion of new housing built within one kilometre of a train station since 1990.

”These findings show that planning policies which sought to increase the proportion of housing built close to designated activity centres and public transport nodes, specifically train stations, appear to have very little influence,” the study says.

The study also interviewed a small number of developers and planners, with the majority believing that they are more instrumental in determining the form and mix of housing being built rather than government planning policies.

”The view expressed most commonly was that developers build what they perceive the market wants, but they are generally conservative and risk-averse in their choices, so they tend to build what they know will sell.”

Dr Goodman says developers will keep doing what is most profitable unless they’re ”compelled or there’s a big incentive for them to do otherwise”.

”In the end it’s a failure of implementing policy,” she says.

”Lots of developers would also like a bit more clarity and certainty. They waste a lot of their time on appeals too.

”Having an uncertain [planning] system isn’t really in anybody’s interest.”

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au

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